The Internal Revenue Service has released more information about changes to the Child Tax Credit that will see parents receiving between $300 and $350 a month starting this summer.
The IRS verified Wednesday that eligible taxpayers will be able to get part of their 2021 Child Tax Credit this year, and that the payments would begin in July and continue until the end of the year.
“Advance payments of the 2021 Child Tax Credit will be made regularly from July through December to eligible taxpayers who have a main home in the United States for more than half the year.”
Under the American Rescue Plan Act, millions of parents will be eligible to receive an increased credit for their 2021 income tax return. The American Rescue Plan will allow half of the credit to be taken in advance. Normally a Child Tax Credit is taken when taxes are filed for the previous year’s income.
The IRS will send those payments out — $350 for parents of children up to 6 years old, and $300 for parents of children ages 6-17 — monthly beginning in July, the release said.
The payments will continue through December.
The credit is available to married taxpayers filing jointly who make less than $150,000; those filing as head of household who make less than $112,500; and all other taxpayers who make less than $75,000.
If an eligible taxpayer does not want to receive the 2021 Child Tax Credit in advance, they will have the opportunity to decline those payments and receive the full benefit when they file their 2021 tax returns next year.
Families claiming the credit will receive up to $3,000 per qualifying child between the ages of 6 and 17 at the end of 2021, and $3,600 per qualifying child under age 6 at the end of 2021.
The prior credit allowed for up to $2,000 per qualifying child under the age of 17 at the end of the year.
In addition to confirming the program will begin in July and run through December, the IRS reminded taxpayers:
- If they have changes in their income, filing status or the number of qualifying children since they filed their income tax return for 2020, they will be able to update that information with the IRS and that more details on how to take those steps will be announced soon.
- The credit for qualifying children is fully refundable, which means taxpayers can benefit from the credit even if they don’t have earned income or don’t owe any income taxes. When a credit is fully refundable, taxpayers will either receive the full amount or, if they owe taxes, they will have the full amount deducted from the amount of taxes they owe.
- The credit will include children who turn age 17 in 2021.
- 2020 tax returns should be filed as soon as possible, so the agency can assess a taxpayer’s eligibility for the tax credit so they can begin receiving payments in July.
The agency did not say if the payments would be sent via direct deposit or by a paper check.
Cox Media Group